Fastjet, the African budget airline backed by Sir Stelios Haji-Ioannou, said it may need to raise funds this year after low demand for flights forced it to issue a second profit warning in less than three months.

The company’s shares plunged more than 40% taking their fall in the past year to more than 70%.

Difficult market conditions in the African airline industry have lasted longer than management expected, Fastjet said in a trading update. Results this year will be worse than expected and the company does not expect to generate any cash in 2016.

Fastjet said it had more than $20m (£14m) of cash available at the end of February and that it had enough to meet operational requirements. But the company said it might seek to raise further funds later in the year.

Ed Winter, the company’s chief executive, said in January he would step down when a replacement was found but Haji-Ioannou has called for him to leave immediately. In its trading statement, Fastjet said it had cut costs and was taking further action including reducing capacity.

Haji-Ioannou, the easyJet tycoon, invested in Fastjet in 2012. The company’s ambition was to carry more than 12 million passengers a year by cashing in on demand for regional travel from a fast-growing African middle-class. But it has taken longer than expected to set up hubs in countries such as Zambia and Zimbabwe.

The company said: “Based on current management forecasts, the board expects results for 2016 to be materially below market expectations and the group no longer expects to be cashflow positive for the year.

“The board may consider raising further funds during the year to provide additional headroom and ensure the company has the necessary resources to fund future growth as market conditions improve.”

Fastjet shares fell as much as 44% to 36.5p. A year ago they were valued at 127p.